Gasoline: Market surges all over on tight supply/demand fundamentals

　 The differentials for MR-size gasoline cargoes on an FOB Northeast Asia basis gained. Bullish factors on both supply and demand sides supported a firm market. Supply concerns from China, a major exporter of Oxy-grade products, was continued, and South Korea also had few spot sales due to export volume restrictions. Indonesia state-owned Pertamina continued to show buying interest. Pertamina conducted a buy tender for 90RON gasoline for October delivery in Indonesia. The total volume was 1.5 mil bbl.

　 Additionally, supply from India and the Middle East to Singapore was reportedly decreasing. According to a market source, cargoes from both regions were heard to be shipped to Europe. A fire broke out at India's Mangalore Refinery and Petrochemicals Ltd (MRPL)'s refinery on Sep 30. It was reported that a boiler in a section developed under its Phase 3 expansion project was the source of the fire. The impact on its refining units remained unclear. MRPL reportedly withdrew a sell tender for 35,000mt of reformate it had issued on the day.

Naphtha: Heavy prices up by decreasing arb cargoes

　 The differentials for the second-half (H2) Nov open-spec naphtha (OSN) delivery to Japan softened slightly compared to those for first-half (H1) November delivery. Weak demand continued to weigh on the market. In Northeast Asia, a sense of overvaluation in the ethylene market reportedly intensified, leading to stronger downward pressure on prices. Some petrochemical producers were also confirmed to be planning to reduce operational rates at their naphtha crackers. It was heard in the market that it would be difficult to increase operational rates, as increasing throughput would soften the olefin market.

　 Meanwhile, in the wake of recent soft naphtha prices in Asia, supply from outside the region was increasingly likely to decrease. It was pointed out that the market could rebound due to this reduction in ex-region supply.

Middle distillates: China export suspension pushes up jet fuel market

　 The differentials for MR-size jet fuel on an FOB Northeast Asia basis went up late this week. A sense of tight supply emerged in Asia as China curtailed exports. Nearly 2 mil mt of exports from China had been anticipated in October alone. Reflecting this, regrade, which indicates the price differential between jet fuel and gasoil, moved into positive territory in the Singapore futures market.

　 The differentials for MR-size 0.001% sulfur gasoil on an FOB Northeast Asia basis declined. With freight rates staying high, buyers were subduing their procurement volumes, leading to a weak market.　ENEOS sold an MR-size cargo loading on Oct 18-20 from two ports, Sendai and Kashima. Idemitsu Kosan had no sales for October-loading cargoes. The company was scheduled to undergo turnaround in October, including a shutdown of the crude distillation unit (CDU) at its 163,000b/d Aichi refinery, limiting its export availability.

　 MRPL in India cancelled a sell tender for 40,000mt or 65,000mt of gasoil and jet fuel loading on Oct 28-29, which was closed on Sep 30. This was influenced by a fire that broke out on same day at MRPL's refinery in India, which led to reduced operational rates of its No.3 crude distillation unit. Market sources reported that repair for the unit would take at least 1-2 weeks.

Fuel oil: Sales emerge from Dangote

　 The differentials for MR-size 3.5% sulfur fuel oil on an FOB South Korea basis retreated. Recent soaring freight rates pushed down prices on an FOB basis. Freight rates for MR-size vessels between South Korea and Singapore had risen to nearly $50.00/mt.

　 However, a sense of tight supply remained in the region, centered around the Singapore market. As previously reported, Russia's export availability had also declined due to damage to its refineries and oil storage facilities, adding to concerns over Middle Eastern supplies.